Easiest Way to Do this (Pensions)

[LennyM1984]

I'm starting a new job in August and will be enrolled with an automatic 3% pension deduction (they will pay 8%). It sounds as though I can only change my contribution % once per year and so I am assuming that I will need to wait for the next calendar/tax year to adjust this.

I usually pay in ~10% and I would like to keep doing the same - I'm a (reluctant!) additional rate (45%) tax payer and so the saving is quite significant (before anybody suggests it, it wouldn't really be feasible to reduce my salary below 100k without hitting various pension contribution limits so realistically my marginal tax rate/saving will be 45% + NI).

Assuming that I cannot change my contribution until next year, what is the easiest way to maintain a similar % and get the tax relief?

1. Setup a SIPP and pay it in there (with a self assessment)
2. Pay it "manually" into an existing pension (and then reclaim it via a self assessment)

I feel like I ought to get into investing (and a SIPP would be a smart place to do that) but equally, I'm not super interested so am concerned that I may not give it the attention it deserves.

Any advice would be greatly received.

[SV_WDC]

Not qualified to offer advice but given a lot of third party guidance on pension consolidations then paying into an existing pension might be worth looking at.

The provider should gross it up 20%, leaving you to reclaim the difference. Because of this you may have to contribute more to get you below the threshold (as you're only getting 20% saving on the contribution)

[butchstewie]

I'd be confirming whether you can do the 10% from the start.

Seems odd (to me at least) if as a new starter you can't chance your contributions for a year.

If not then look at fees of a SIPP v the workplace scheme.

[Mr Pointy]

Well first of all ask your new employer if you can increase your contributions for day 1 as you might be able to do this & you problem is solved. As to whether to start a new SIPP or contribute to an existing one you need to know how your existing pensions are performing. If they are doing well then add more to them but if they are not then look at putting your money elsewhere & consider moving the underperforming pension.

[supersport]

I would have thought that most employers ask how much want to contribute up front, or that this would count as your one change for this year.

Otherwise just open a SIPP and put the balance in, and put the gross amount on your tax return. After Rachel’s Hackery you’re not going to loose out on the NI soon, so it doesn’t make a lot of difference.

[oyster]

Challenged the ‘one update per year’. It bks and is just HR laziness.

[LennyM1984]

oyster said:

Challenged the one update per year . It bks and is just HR laziness.

You are probably right. Will have a chat with them once I start.

A SIPP may not be the worst idea ever as it would allow me to "adjust" my taxable income at the end of each tax year (lump sum payments etc)